Meridian Capital’s AD&S Team Attends ACG Los Angeles Aerospace & Defense Middle Market Leadership Forum
Published September 22, 2022
The Meridian Aerospace, Defense & Space team attended the inaugural Association for Corporate Growth (ACG) Los Angeles Aerospace & Defense Middle Market Leadership Forum this month. The event provided a great opportunity to discuss industry trends and the outlook for M&A with industry experts, service providers, and companies.
There were several key takeaways from the conference:
- There is conviction in the underlying fundamentals of the commercial aerospace industry and optimism on its recovery, despite significant uncertainty around build rates.
- The defense market has benefited from geopolitical tensions and is expected to experience a sustained upward trend in defense spending. The defense market may see some valuation compression as the commercial market recovers and investors look to deploy capital again in that market.
- Commercial space presents a significant growth opportunity for suppliers especially surrounding launch systems, satellites, and electronics. Tier 3 and Tier 4 suppliers that provide components and subsystems to a diverse range of customers and programs are expected to be attractive M&A assets.
- Growing working capital demands, labor shortages, and supply chain headwinds are likely to have meaningful impacts on suppliers as production rates increase in the coming years, these challenges will encourage consolidation among the supply base.
- The overall positive industry outlook combined with the supply chain challenges create an attractive M&A environment with substantial opportunities for investors and strategics looking to capitalize on these dynamics.